DEALBOOK; Dismissing Concerns, Panel Backs White’s S.E.C. Nomination

By BEN PROTESS

Published: March 20, 2013

Mary Jo White cleared an important hurdle on her path to becoming a top Wall Street regulator when a panel of lawmakers overwhelmingly backed her nomination on Tuesday.

Dismissing concerns about Ms. White’s close ties to Wall Street, the Senate Banking Committee cast a 21-to-1 vote in her favor, sending her nomination to the full Senate for a vote. The committee’s bipartisan support for Ms. White, President Obama’s pick to lead the Securities and Exchange Commission, suggests she is poised to sail through the Senate in the days ahead.">

Mary Jo White cleared an important hurdle on her path to becoming a top Wall Street regulator when a panel of lawmakers overwhelmingly backed her nomination on Tuesday.

Dismissing concerns about Ms. White’s close ties to Wall Street, the Senate Banking Committee cast a 21-to-1 vote in her favor, sending her nomination to the full Senate for a vote. The committee’s bipartisan support for Ms. White, President Obama’s pick to lead the Securities and Exchange Commission, suggests she is poised to sail through the Senate in the days ahead.

In contrast, the committee offered muted support for another financial regulator, Richard Cordray, who is in line to lead the Obama administration’s new consumer protection watchdog. Mr. Cordray eked out a 12-to-10 vote along party lines on Tuesday, indicating that he is likely to face a confirmation fight in the full Senate. In a reflection of the entrenched political battle lines plaguing the agency, every Republican voted against him.

Ms. White faces some skeptics, too. While every Republican on the committee supported her nomination, one Democrat balked: Senator Sherrod Brown, Democrat of Ohio, who has sounded alarms about her turns through the revolving door connecting government and private practice. He said he was concerned that Ms. White, a former federal prosecutor who spent the last decade representing big banks like JPMorgan Chase and UBS, could carry conflicts of interest.

“I don’t question Mary Jo White’s integrity or skill as an attorney,” Mr. Brown said in a statement. “But I do question Washington’s long-held bias toward Wall Street and its inability to find watchdogs outside of the very industry that they are meant to police.”

To avert potential conflicts, Ms. White has agreed to recuse herself for one year from most matters involving former clients, though this step presents a potential hindrance to her authority. She has also vowed “as far as can be foreseen” never to return to Debevoise & Plimpton, the firm where she built a lucrative legal practice.

Mr. Brown added that Ms. White “will have plenty of opportunities to prove me wrong. I hope she will.”

The otherwise lopsided vote in favor of Ms. White came as little surprise. At a confirmation hearing last week, she received a friendly reception during two hours of testimony. Even one of the Republicans on the committee, Senator Tom Coburn of Oklahoma, declared his intention to support her.

Republicans took a harsher view of Mr. Cordray, whom Mr. Obama nominated to be director of the Consumer Financial Protection Bureau. In January, when the White House chose Ms. White for the S.E.C. job, it also reappointed Mr. Cordray to a position he had held for a year under a temporary recess appointment. Last year, the Senate declined to confirm him in the face of Republican concerns about the new agency — opposition that persisted on Tuesday.

While Republicans have expressed support for Mr. Cordray himself, they are staunchly opposed to what they see as his unchecked authority over the bureau. They have vowed to oppose his nomination, or any nomination to run the bureau, unless the White House makes it a bipartisan panel.

Mr. Crapo said his opposition to Mr. Cordray reflected a “broader debate over the structural” setup of the bureau. “Where is the transparency?” he asked. “Where is the accountability?”

The banking committee’s tepid approval leaves Mr. Cordray’s next step unclear and his agency in limbo. The White House could strike a deal with Republicans, but it has little incentive to do so. For now, Democrats are portraying the Republican opposition as an affront to consumers, leaving conservatives in a politically vulnerable position.

Yet Democrats could seek to avert a broader assault on the bureau. Corporate groups are challenging Mr. Cordray’s recess appointment in the courts, an attack that could jeopardize a number of rules the agency has enacted.

While Ms. White faces far fewer obstacles to her nomination, significant challenges await her at the S.E.C. The agency is under pressure from Congress to complete new rules for Wall Street and take aim at financial fraud.

Ms. White, who carried out an aggressive crackdown on terrorism and organized crime as the first female United States attorney in Manhattan, vowed to take a hard line with Wall Street.

“If confirmed, it will be a high priority throughout my tenure to further strengthen the enforcement function of the S.E.C.,” she said at her confirmation hearing last week. “It must be fair, but it also must be bold and unrelenting.”

This is a more complete version of the story than the one that appeared in print.

PHOTOS: The Senate Banking Committee voted overwhelmingly for Mary Jo White, left, but was split on party lines over Richard Cordray. (PHOTOGRAPHS BY T.J. KIRKPATRICK/GETTY IMAGES)

Mary Jo White cleared an important hurdle on her path to becoming a top Wall Street regulator when a panel of lawmakers overwhelmingly backed her nomination on Tuesday.

Dismissing concerns about Ms. White’s close ties to Wall Street, the Senate Banking Committee cast a 21-to-1 vote in her favor, sending her nomination to the full Senate for a vote. The committee’s bipartisan support for Ms. White, President Obama’s pick to lead the Securities and Exchange Commission, suggests she is poised to sail through the Senate in the days ahead.">